Minden Town Board members voted unanimously Wednesday to increase the cost of water rights more than 2 1/2 times to $10,000 per acre foot.
The town, which had sold water rights for $3,500 per acre foot, said the hike was temporary until an analysis of new home prices is complete and the rate can be tied to a percentage of the sale price of a new home.
"Our policy is to provide water for the orderly development of Carson Valley," said town board member Bob Hadfield.
"We have good, quality water that meets federal standards and doesn't need treatment," he said.
Minden owns 12,000 acre feet of water and is a major purveyor throughout Carson Valley along with the Gardnerville Water Co.
The board raised the rates following a study by appraiser Lyn Norberg that indicated water sells for up to $50,000 per acre foot in Washoe County.
The board agreed to sell water at $5,000 an acre foot to seven customers who had made requests by the end of last year.
Tying the cost of water to the median home price would give the town flexibility, Hadfield said.
"The price would be driven by what happens in the Valley," he said. "It also gives us the ability if we have a project that is attainable housing - should that be the initiative - to be flexible to help the real world situation."
Minden and the Gardnerville Water Co. have the authority to distribute water throughout Carson Valley, excluding the Topaz area and Lake Tahoe.
"Along with the Town of Gardnerville, we, in effect, set the water cost in this entire Valley by virtue of the size of our resource," he said. "We do not want to hoard it. We want to make it available as best we can."
Officials discussed plans for two 5-million gallon water tanks for storage and pipelines to move the water throughout the Valley.
Town engineer Bruce Scott estimated costs to be $25 million for the tanks and a 1-mile, 16-inch water line along Buckeye Road and a 24-inch waterline from Minden to Indian Hills.
The costs would be paid through the sales of water rights.
"There is a strong relationship between the money we need to meet our goals and the value of our water rights at $10,000 per acre foot," Hadfield said.
Minden resident Robb Hellwinkel said businesses and developers would expect to pay between $10,000-$20,000 per acre foot.
"I don't think the price of water rates is going to deter any growth," Hellwinkel said.
An acre foot is the volume of water sufficient to cover an acre of land to a depth of 1 foot.
It equals approximately 325,851 gallons of water, enough to supply a five-person household for one year.
